2024-03-01 03:27:14
The housing construction target originally set by the federal government is a long way off. Associations are calling on the traffic lights to act quickly.
Gloomy prospects for housing construction in Germany despite strong demand in many regions: After a collapse in building permits in 2023 to their lowest level in more than ten years, the already tense situation threatens to become even worse. “The lack of building permits will lead to a lack of apartments in the coming years and will further heat up the market,” warned the Central Association of the German Construction Industry.
According to preliminary data from the Federal Statistical Office on Thursday, approvals from building authorities fell by 26.6 percent to 260,100 apartments last year. The last time the number was lower was in 2012, when it was 241,100 units. The federal government’s original target of 400,000 new apartments per year is a long way off.
“This is a truly catastrophic crash”
The building permits say nothing about how many apartments were actually built last year – the Federal Statistical Office is expected to announce figures on this at the end of May. However, the permits are an important indicator of future construction activity.
However, the North Regional Association of the Federal Association of Independent Real Estate and Housing Companies (BFW) has already announced that privately financed housing construction in Hamburg, Schleswig-Holstein and Mecklenburg-Western Pomerania has almost collapsed. This is not a decline, “it’s a really catastrophic crash,” said the state association’s chairman, Sönke Struck.
Association: Federal government must step on the gas when it comes to housing construction
The Ifo business climate in residential construction fell to its lowest value ever measured in January. “The outlook for the coming months is bleak,” said Ifo survey director Klaus Wohlrabe recently. There were no new orders and at the same time further projects were being cancelled, and more than half of the companies surveyed complained about a lack of orders.
The industry also criticizes sometimes inadequate funding offers and high government taxes. This refers to government-related costs when building apartments, such as property transfer tax, sales tax, technical building regulations or energy requirements. “Building is actually impossible today,” said the President of the Central Real Estate Committee, Andreas Mattner, recently.
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The GdW Federal Association of German Housing and Real Estate Companies demanded that the federal government finally step on the gas when it comes to housing construction. “We are in a deep housing crisis. The measures introduced by the government so far are obviously too slow and too little,” said association President Axel Gedaschko. “We need a large-scale interest subsidy program for affordable housing – now.”
The construction industry called for the Growth Opportunities Act to be passed quickly. “The building contractors are fighting for their existence with their employees and have no understanding of political games,” said Felix Pakleppa, general manager of the Central Association of the German Construction Industry. The Union is linking its approval in the Federal Council to the compromise negotiated by the Mediation Committee to the government withdrawing the planned cuts in agricultural diesel subsidies.
Cities suffer from a housing shortage
According to estimates by the Ifo Institute, 270,000 apartments were built last year. For the current year, the Munich Economic Research Institute expects only 225,000 completions. At the same time, there is a severe housing shortage in many cities, which has recently driven up rents sharply.
Private builders and companies are particularly concerned about increased interest rates for real estate loans and higher construction prices. Many projects are being postponed or canceled, especially in housing construction.
“The reality is a crippling combination of persistently high construction costs and interest rates combined with a lack of funding. Almost no one can currently build, especially not affordable for the middle class,” said GdW President Gedaschko, describing the current situation.
Permits for one- and two-family homes have fallen significantly
The statisticians’ figures include both building permits for apartments in new buildings and renovations. A total of 214,100 apartments were approved in newly built residential buildings last year. That was 29.7 percent less than in the previous year. The number of building permits for single-family homes (minus 39.1 percent to 47,600) and two-family houses (minus 48.3 percent to 14,300 apartments) fell particularly significantly.
These types of buildings are generally constructed by private individuals. According to the information, around two thirds of new apartments in Germany are being built in apartment buildings, which are predominantly built by companies. Here the number of approvals fell by 25.1 percent to 142,600 apartments.